Friday, December 20, 2013

MADISON – A source close to the toy industry has once again leaked a copy of Santa's perks list for Wisconsin politicians and newsmakers. Here's what the good boys and girls in Madison and Washington will reportedly find in their stockings this Christmas. But they better not pout and they better not cry if an alert district attorney asks why gifts were delivered down chimneys after midnight.

Gov. Scott Walker – Let's see, what to get the governor who has everything? How about speculative national press about his 2016 presidential stock? Nope, he's got that. A 2014 re-election opponent who can be tarred as a "Madison elite" in third-party ads? No, Walker's got that, too. How about a bold economic development plan that stiff-arms the old guard and embraces the new? Now, there's a gift that keeps on giving – to the state of Wisconsin.

Democratic candidate for governor Mary Burke – She's a woman with business credentials (Trek Bicycle) and government experience as state Commerce secretary and as a member of the Madison School Board. Beating an incumbent is never easy, however, and doing so requires creating electricity and excitement. Burke's gift: A copy of "Let The People Decide," a book by Bill Kraus about Lee Dreyfus and his long-shot, but wildly entertaining, 1978 campaign for governor. Politics can't be all Castor oil.

The UW Board of Regents – "Now Falbo, now Farrow, now Millner, you vixen! On Bradley, on Higgins, on Whitburn and 12 more without friction! To the top of the search pile! To the top of Bascom Mall! Let's hire a UW president acceptable to all."

U.S. Sen. Ron Johnson – Everyone in Washington, D.C., deserves at least one friend, so in the spirit of President Harry Truman, Santa should get Wisconsin's Republican senator a dog. On second thought, this Tea Party believer is likely to berate the poor critter for begging for a handout.

U.S. Rep. Paul Ryan – Speaking of friends in Washington, 1st District Republican Ryan committed the cardinal sin of compromising with Democrats and was branded a turncoat by the conservative "no quarter!" crowd. Not that Ryan's budget deal is a long-term answer, but gridlock won't end overnight without small victories. Santa's gift to Ryan is a vintage "Favre is Judas" trucker cap to remind him this, too, shall pass.

The Wisconsin Legislature – While it's hardly the Age of Aquarius, more bills are passing the Legislature with bipartisan support. The early stage capital bill passed in the spring, for example, with only five "no" votes. How about 132 friendship rings or coupons to visit Madison's "Snuggle House?" Well, OK, maybe the Snuggle House is a reach.

Former U.S. Sen. Herb Kohl – Having carried the ball, quite literally, since 1985 as owner of the Milwaukee Bucks, Kohl is shopping for ownership partners to help keep the team in Milwaukee. Santa's gift to the civic-minded Kohl is a rebound from the Bucks' disastrous season start to tweak buyer interest. Or a No. 1 lottery pick, assuming the turnaround never happens.

Milwaukee County Executive Chris Abele – Born and bred an entrepreneur, Abele has put $10 million of his own money where his political mouth is when it comes to business startups. He launched CSA Partners LLC this year to invest in early stage companies in southeast Wisconsin and beyond. Santa's gift to Abele is a desk full of business plans from aspiring 'treps.

UW-Madison Chancellor Rebecca Blank – No sooner did Blank arrive on Wisconsin's flagship campus than she faced a series of retirements and opening in key positions, especially those tied to economic growth. The list includes provost, director of the Office of Corporate Relations, director of the Discovery to Product effort, director of University Research Park, as well as breaking in some recently hired deans. Santa will slip a copy of "Your New Job Title is 'Accomplice': A Dilbert Book" in the chancellor's stocking.

For Wisconsin's rising political stars: In an era when sharp personal attacks and partisanship drive more good people away from politics than it attracts, it's reassuring to know that some quality office-holders continue to be attracted to public service. That's a gift to Wisconsin citizens. Happy holidays, everyone!

-- Still is president of the Wisconsin Technology Council. He is the former associate editor of the Wisconsin State Journal in Madison.

Thursday, December 19, 2013

December 9 - 15 was Computer Science Education Week, and two events that occurred here in the 24th State Senate District last week demonstrate our leadership in teaching and learning about digital technology.

Tomah High School celebrated the week by participating in an Hour of Code, an event promoted nationally by Code.org to help students learn about the computer languages that let our smart phones, tablets, towers and laptops do all the amazing things they do. Because Tomah High organized its Hour of Code activities to involve the entire student body, it received an award of $10,000 in laptop computers from Code.org – the only high school in Wisconsin to receive the award. The students, faculty and staff at Tomah High certainly deserve this recognition and the Hour of Code award for their dedication to excellence in technology education.

Computer Science Education Week was also the backdrop for an exciting announcement by the North Central Wisconsin Workforce Development Board (NCWWDB) that it will be partnering with Job Centers in its region to help job seekers assess and improve their basic computer skills and find careers in information technology.

The services start with an online, self-guided computer skills assessment to pinpoint strengths and improvement areas in basic computer skills and the use of common programs such as Internet browsers, email, word processing, Windows and the Mac operating system. Based on the results of the assessment, job-seekers can take a series of courses designed to help them master basic computer literacy as well as to conduct an effective job search online.

In response to the growing demand throughout Wisconsin for workers with information technology skills, the program has expanded from simply helping job seekers assess and develop their computer skills to career counseling as well. Those who wish to pursue an IT career can be channeled into a variety of related courses offered by our technical colleges and universities.

The NCWWDB serves Adams, Forest, Langlade, Lincoln, Marathon, Oneida, Portage, Vilas and Wood Counties. Anyone interested in pursuing these new computer education services can contact the Wisconsin Rapids Job Center at 715-422-5000 or the Marathon County Job Center at 715-261-8700.

As digital technology finds its way into every aspect of our lives, the demand for computer programmers, engineers and other information technology specialists will continue to grow. Wisconsin’s major industries – manufacturing, agriculture, food production, wood and paper products, and more – all rely on computer technology and people who have mastered them.

Having strong computer science education programs like those celebrated during Computer Science Education Week does more than simply help those who learn about the digital devices that have become so essential to our lives. It also helps Wisconsin prepare to have a competitive workforce and a stronger economy.

I’m glad to see that educational institutions like Tomah High School and the workforce programs provided by NCWWDB in my district are playing a leadership role in providing computer science education to students and local residents. It is one more element of the exciting technological innovation going on in schools, businesses and research institutions throughout the 24th Senate District and across Wisconsin.

Monday, December 16, 2013

Matthew Gonnering, the chief executive officer of Widen Enterprises, isn't the kind of boss who wants his employees to go without health-care coverage. If nothing else, he explained at a recent gathering, offering health insurance helps attract and retain the kind of talent necessary to run his tech-related business.

However, rising health care costs and the advent of the federal Affordable Care Act combined to make things more complicated for Gonnering and his team at Widen, a digital asset management company in Madison.

As Gonnering told a recent meeting of the Wisconsin Innovation Network, Widen was faced with a 12 percent rate hike in 2014 for its existing coverage, modifying its coverage to share some costs with employees, or ending company-sponsored coverage and letting workers fend for themselves on the federal government's health insurance marketplace "exchange."

In the end, Gonnering said, the company elected to keep its existing coverage plan with employees sharing in premium payments – something they didn't pay in the past. That will continue for at least one year while the company waits for the small business side of ACA, or "Obamacare," to sort itself out.

"We felt we could remain competitive with employees, in addition to the wellness plan that we had… without having those employees get nervous or worry about switching jobs," he said.

That story is typical for small businesses across Wisconsin and the United States as the Affordable Care Act inexorably begins to change how those companies, and millions of individuals, shop for health care coverage. As 2013 rolls to a close, many wonder: What's our next step if we want health care coverage in the year ahead?

The answer depends a great deal on the size and current coverage plan of your company – and whether you're a one-person shop.

Al Wearing, the chief insurance officer for Group Health Cooperative of South Central Wisconsin, spoke at the same WIN meeting. While he wants federal health-care reform to work over time, Wearing said it may be better for some employers to err on the side of caution before embracing a change that could confuse or even harm their employees.

The federal website for the ACA, http://www.healthcare.gov, appears to be functioning well after a dysfunctional start, but Wearing said many small business owners may still elect to "stay on the sidelines" and accept renewals of current coverage while the law's small-business mandates get worked out.

The story is different for individuals, especially those who lack coverage now. They must sign up by Dec. 23 through the website if they want coverage beginning Jan. 1, 2014, said Barbara Zabawa, head of the health care law team for Whyte Hirschboeck Dudek in Madison.

So far, the federal government has not delayed the individual requirement. That means uncovered individuals who do not sign up by March 31, 2014 will face federal tax penalties that will grow over time. For uncovered people who don't sign up for coverage by March 31, the penalty is $95 per adult or 1 percent of annual income, whichever is higher. That penalty grows in succeeding years – and the sign-up periods will be more sharply defined.

For entrepreneurs and sole proprietors who aren't covered today, Zabawa said, checking out http://www.healthcare.gov makes sense because it can match people to a coverage plan.

"It's really going to depend on their income and where they live," Zabawa said. "In many cases, they may find themselves pleasantly surprised about available coverage plans."

Zabawa agreed the new law is more complicated for businesses. The ACA's Small Business Health Options Program is open to employers with 50 or fewer full-time employees, but deadlines tied to small business coverage have been extended. Most businesses with more than 50 employees cannot use SHOP today, but it will be open to employers with up to 100 full-time employees in 2016.

A word of caution: If you're eligible for job-based insurance, you can still consider switching to a federal marketplace plan. But you won't qualify for lower costs based on your income unless the job-based insurance is unaffordable or doesn't meet minimum standards. You also may lose any contribution your employer makes to your premiums.

The bottom line: Small businesses may be able to improvise in 2014, but uncovered individuals and one-person shops may want to "insurance shop" now. Consider it a new angle on the online holiday buying season.

-- Still is president of the Wisconsin Technology Council. He is the former associate editor of the Wisconsin State Journal in Madison.

Monday, December 9, 2013

When last you heard the name "Tommy Thompson," the reference was almost certainly in the context of state or national politics.

Today, the ex-governor, former U.S. Cabinet secretary and one-time candidate for U.S. Senate is operating under a very different title: Tommy G. Thompson Inc.

More precisely, Thompson is the chairman and chief executive officer of Thompson Holdings, a business umbrella under which one of the most familiar names and faces in Wisconsin politics is investing and advising about 30 companies, mostly in the health care space.

"When I left public office at age 63, I hadn't saved much," Thompson said recently when asked about his transition from career politician to private businessman. "I figured it was about time to change that."

Thompson's tenure as Health and Social Services secretary under President Bush in the early 2000s was an extension of an interest in health care that began during his tenure as governor, which spanned from 1987 to 2001. He became enamored with health-care innovation, organizing the first federal summit on electronic health records, as well as promoting healthier lifestyles and pushing the concept of "medical diplomacy" around the world.

His DHHS tenure also introduced him to many deep-pocket companies in and around health care, many of which were eager to work with him once he left government. Thompson became a partner in a prestigious Washington law firm and also became a senior advisor to Deloitte LLP, where he founded the Deloitte Center for Health Solutions.

Slowly but surely, Thompson wound up on more corporate boards than a reasonable travel schedule might allow, including La Crosse-based Logistics Health Inc. After a brief bid for the presidency in 2007, Thompson returned to the business world and more or less stayed there until his 2012 run for the U.S. Senate, in which he was defeated by Democrat Tammy Baldwin.

As personally bitter as it was to Thompson, his loss may have been a blessing in disguise. Today, Thompson talks with excitement about his portfolio of mature and emerging companies and his efforts to help them find financing, sometimes from venture capitalists or other private equity investors. The list includes:

* Cytori Therapeutics, which develops regenerative medicine products for different cell-based therapies. Thompson is a director of this publically traded company.

* Careview Communications, which provides services that help reduce hospital-related falls, bed sores, sitter costs and more through patient monitoring systems. Also a publically traded company, Thompson is a director.

* StayHealthy, a private firm that provides both physical and online kiosks to help people manage their health. Its self-serve kiosks offer clinical-grade health checks for blood pressure, heart rate, body weight and composition and other factors. It has about 3,000 kiosks in place nationwide.

* Evofem, which is a privately held biotechnology company that largely focuses on health issues for women. It is developing products for dermatology, pain management and prevention of sexually transmitted diseases, many of which are affordable solutions for women in developing nations. It's worth noting that Thompson's wife, SueAnn, is the founder of the Wisconsin Women's Health Foundation and his daughter, Tommi, is its executive director.

* Physicians Realty Trust is a publically held, self-managed health care real estate company. It invests in outpatient care facilities, medical office buildings, hospitals with specialized acute and post-acute care services and other health care facilities. Based in Milwaukee, this company has raised millions of dollars through an initial stock offering and is looking to raise more.

* Centene Corp., a public company that focuses on care plans for underinsured and uninsured people. Thompson is a board director.

* C.R. Bard, a publically held global company that markets products related to vascular treatments, urology, oncology and surgical specialties. Thompson is a board member.

What's largely missing from the Thompson portfolio so far are Wisconsin-based startups and emerging companies, but he says there might be interest there over time if he and other partners exit from current deals with money to reinvest.

"I know from my time as governor, in particular, that Wisconsin has great innovation and great technology," Thompson said. "I also know that hasn't changed."

At age 72, don't look for Thompson to become an entrepreneur, but the platform he has built in health care may help younger companies plug in to broader networks.

-- Still is president of the Wisconsin Technology Council. He is the former associate editor of the Wisconsin State Journal in Madison.

Wednesday, December 4, 2013

It looks like the U.S. economy grew somewhere between 2.5 and 3 percent in 2013. That falls short of what most economists predicted for the year. But there is a silver lining: The economy grew despite wrongheaded federal policies that have hobbled the recovery.

That fact demonstrates just of how resilient the U.S. economy is and why there is reason to be optimistic for 2014. But if policymakers really want to unleash the job-, opportunity- and wealth-creating power of free enterprise, they should embrace the following policies:

Tap Natural Resources: Energy is the lifeblood of a developed economy and the insatiable demand for it, especially oil, has led to the transfer of trillions in U.S. wealth to oil-rich nations, including some that are unfriendly to the U.S.

But now the technology (hydraulic fracturing) exists to affordably and safely extract oil and natural gas from America's vast shale deposits. It is a geological gift and one that, if fully utilized, could drive the economic recovery and do more than anything else to make U.S. businesses, especially manufacturers, globally competitive for decades to come.

As an added benefit, Wisconsin's economy is getting a substantial boost from the U.S. energy boom. Our state doesn't have shale oil or gas, but we do have deposits of the coarse sand that happens to be perfect for hydraulic fracturing and we manufacture much of the equipment used in the process as well. Wisconsin now has at least 150 sand mines and processing facilities, up from just 10 a few years ago. In all, the energy boom has created about 20,000 Wisconsin jobs.

Reduce Government Spending and Taxes: Some deride not spending more than you receive in revenue as austerity. I think its common sense. Fueled by years of trillion dollar deficit spending, the U.S. national debt is now $17 trillion. Interest rates will eventually rise and when they do U.S. debt payments will balloon and crowd out what little discretionary spending there is in the federal budget.

Canada used the substantial revenue generated from developing its oil sands resources to reduce its national debt and lower its corporate tax rate to 15 percent. At 35 percent, the U.S. rate is the highest in the industrialized world.

Washington should follow Ottawa's example.

Create Regulatory Certainty: U.S. businesses need relief from the staggering $1.8 trillion it costs per year to comply with regulations.

One giant step towards that goal would be to adopt the REINS Act, which would reassert congressional oversight of federal regulatory agencies, like the Environmental Protection Agency, National Labor Relations Board, Internal Revenue Service and the Occupational Safety and Health Administration. Those agencies have been among the most aggressive in expanding regulations by executive fiat at the expense of U.S. businesses and economic growth.

Most Wisconsin businesses would also support repealing ObamaCare, according to WMC's most recent membership survey. Even with the delayed implementation of the employer mandate until 2015, the law's complexity and the uncertainty it has created is costing the economy jobs and retarding investment.

Align Education and Training with Needs of the Economy: Even if the U.S. cut its corporate tax rate, slashed regulatory burdens, reformed or repealed ObamaCare, eliminated frivolous lawsuits on business, and secured abundant and affordable energy supplies; we will still need a skilled and motivated workforce. Without it, everything else is window dressing.

There continues to be a misalignment between the jobs Americans seek and are trained for versus the positions the economy needs. It's called the skills gap. But there is also an enthusiasm gap, which I define as a general lack of interest in specific jobs or a drift away from what David Azerrad from the Heritage Foundation calls the "culture of work."

As the U.S. workforce continues to age and birthrates fall below replacement levels in some regions, including Wisconsin, this problem will only get worse.

One solution is immigration reform that allows foreign students to use their high quality U.S. education for the benefit of U.S. companies. Forcing them to leave due to an inadequate Visa program foolishly sends some of the world's most talented people into the waiting arms of America's competitors. There is also a need for a similar guest worker program for lesser skilled, but nonetheless in demand foreigners.

Protect and Continue State Level Reforms: Wisconsin's transformation from an anti-business to a pro-business state is impressive, but incomplete. More reforms are needed, including harmonizing the state and federal versions of the Family Medical Leave Act. Currently, Wisconsin businesses have to comply with both laws, which is unnecessarily costly, confusing and burdensome.

Wisconsin's economic destiny is tied to the national and global economies, but that isn't an excuse to take our foot off the reform accelerator.

Tuesday, December 3, 2013

A recent Wisconsin Taxpayers Alliance study confirmed that Wisconsin lost more jobs than it gained over the past decade, but there's cause for hope in economic sectors that are sources of young, high-growth companies. Here are 10 trends shaping the future of Wisconsin's tech-based economy:

Campus entrepreneurism: A decade ago, it was difficult to find organized entrepreneurial education programs on Wisconsin campuses, the exceptions being the Weinert Center of Entrepreneurship at UW-Madison and the Kohler Center for Entrepreneurship at Marquette University. Today, such programs are relatively widespread and popular. At the UW-Whitewater, for example, the "Launch Pad" is a student business incubator. At the UW-Madison, a dormitory floor has been set aside for self-identified entrepreneurs. This campus fad won't soon fade.

Hacker spaces: These eclectic gathering places attract tinkerers, techies, hobbyists and curious students – but they're also becoming shared working spaces for entrepreneurs. Two prominent examples are Milwaukee Makerspace and Sector67 in Madison, locations that offer opportunities for engineers, artists and people who design prototypes. It's "shop class" on an adult scale for those who want to learn and have fun, as well as a platform for serious startups.

Regional research hubs: Research and development was once the province of a few major academic centers in Wisconsin, such as the UW-Madison and the Medical College of Wisconsin. Judged by sheer R&D dollars raised and spent, that's still true. However, the past dozen years have seen the rise of research clusters on other public and private campuses, including UW-Milwaukee. That showed in a recent competitive grant process that led to $23.5 million in state awards for a dozen UW System projects, most of which were outside Madison.

Talent spinoffs: Epic Systems in Verona is the U.S. "gold standard" when it comes to electronic health records, and it continues to grow sharply in revenues and employees. It also loses talented workers from time to time, and many would prefer to stay in Wisconsin. That's one reason why health information technology is a promising cluster here. Other companies such as GE Healthcare and Promega occasionally shed talent, too, often in the form of managers who start or manage other companies. It's not a rap on those major companies, but a compliment to their hiring systems, training and corporate cultures.

The rise of research parks: When University Research Park in Madison was founded in 1984, it was seen as an off-campus outpost for science faculty pursuing the impure goal of commercializing their ideas. Today, URP is home to about 125 companies and nearly 4,000 highly paid workers. Forbes magazine this month named URP as one of "12 business incubators changing the world." University Research Park will double in size over time, even as other high-quality parks in Madison and beyond, such as UW-Milwaukee's Innovation Park, come on line.

Big company interest in emerging firms: Not so long ago, many corporate CEOs thought "entrepreneur" was French for "unemployed dreamer." Today, some of Wisconsin's iconic companies see young companies as potential R&D sources, suppliers, acquisition targets, investment possibilities and innovation. That trend may continue and companies look for outsourcing opportunities in their own backyards.

Startup accelerators: Tech-based accelerators were born on the West Coast, where groups such as Y Combinators and TechStars decided to invest in a small number of carefully selected companies and put them on a crash course to company growth. It's now a national and even global phenomenon. While there's always a chance the "accelerator bubble" could burst, Wisconsin has some top-notch accelerators on the scene, such as Gener8tor in Madison and Milwaukee and the Global Freshwater Accelerator in Milwaukee.

The information technology boom: The "dot.com" bust of 2000 is ancient history. Nationally, investors are flocking to companies engaged in health IT and other software, gaming, mobile platforms, cybersecurity and more. Investors outside Wisconsin are taking note, and it's no accident that major companies such as Google, Microsoft, Red Hat, IBM, HP and Intel all have a presence here.

New funding sources: Wisconsin's angel investing metrics have grown steadily over 10 years, for reasons that range from state tax credits for investors to a statewide networking and deal-flow structure. The venture capital landscape has been less developed, but that may change with four new funds in various stages of formation. Crowdfunding may help, too, after the rules for equity investments in startups shake out.

Globalization: Wisconsin's exports across the board continue to rise, and tech-based companies are beginning to crack into those markets. Foreign direct investment is also a factor as investors abroad look for companies, ideas and people – all in a stable business environment. "In-sourcing" isn't a stampede yet, but it is coming.

There's an 11th trend, assuming Wisconsin policymakers don't lose sight of the goal line. Job and economic growth is a bipartisan imperative. Manufacturing, agriculture and tourism may always define Wisconsin, but companies in emerging sectors will drive more than their share of growth.

-- Still is president of the Wisconsin Technology Council. He is the former associate editor of the Wisconsin State Journal in Madison.